On Monday, top Federal Reserve official Charles Evans said the U.S. economy is expected to grow 2.5% in 2013, a substantial shortfall from the 4.2% growth rate the Obama administration originally projected.
Mr. Evans also stated that U.S. unemployment would drop from its current rate of 7.8% to 7.4% this year and would go even lower in 2014 to 7%.
But even if that occurs, it will still not reach the rosier projections President Barack Obama made in August 2009 when his Office of Management and Budget (OMB) stated that “the Administration expects the recovery to proceed most rapidly from 2011 to 2014 and eventually lower the unemployment rate to below 6 percent.”
“One good indicator of labor market improvement would be if we saw payroll employment increase by 200,000 each month for a number of months,” said Mr. Evans. “We’ve been averaging about 150,000, but it’s been very uneven… we need a higher pace of employment growth and less volatility in that pace.”
Given the Obama administration’s track record of overestimating economic growth figures, perhaps the greatest concern should be reserved for 2014: the White House predicted the United States will see only 2.9% GDP growth.